Question
Terracotta, Inc., makes toy soldiers. Company management believes that a new model would sell well at a price of $67.6. The company estimates unit materials
Terracotta, Inc., makes toy soldiers. Company management believes that a new model would sell well at a price of $67.6. The company estimates unit materials costs to be $9 for the model, and overhead costs would average $29.35 per unit. The local wage rate for direct labor is $21 per hour. Terracotta has a goal of earning an operating profit of 30 percent of manufacturing costs for each of its products. |
Required: |
What direct labor hour input (hours per unit) could Terracotta allow and still achieve its profit goal? (Round your answer to 2 decimal places.) |
Maximum direct labor time per unit | hours |
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